The Landlord Insurance Party Is Over

Some straight talking and future visions from the Editor’s keyboard;

The Tenant Reform Bill aims to give renters more power in the UK private rented property market. One consequence of that could well be a reduction in the long term of private landlords. For the past two decades many wealthy people in the UK – and some entrepreneurs from humble backgrounds – have built up their own pension portfolios in bricks and mortar. These have turned out to be highly valuable assets, which keep pace or sometimes even exceed the official rate of inflation. Far better than investing on the stock market, or crypto, or many private pension plans…Equitable Life anyone?

But the WEF and client state governments want to end that self sufficiency and long term ethos of safe investment. If you listen to the mood music you can hear a sustanined attack the concept of ownership per se. Look at the recent noises across the MSM on second homes in Wales and Cornwall for example. Locals were happy to cash in and sell properties to rich people for a good profit, but now they want a ban on second homes and `noisy’ AirBnB rentals.

The Tenant Reform Bill, which promises `forever’ homes to renters, regardless of the changing circumstances of the landlord who actually owns the property, is another move prompted by the same globalist/Marxist ideology that owning things – cars, property, fashionable clothes, anything really – is inherently wrong. Insurers need to wake up to this danger – if people rent stuff, on demand, then they are very unlikely to pay a decent sum to insure it, or look after it, because they have no emotional investment in the item. If you study what people do, not what they say, then you’ll understand how insurance claims really work.

SMALL LANDLORD EXODUS?

New research from Total Landlord Insurance shows that 79% of landlords say they have no plans to increase or decrease their buy-to-let portfolio in the near future. The research showed a further 17% of landlords said they planned to reduce the size of their portfolio due to the government’s latest plans to reform the rental sector. The Department for Levelling Up, Housing and Communities recently changed the renting rules to ban ‘no-fault’ evictions and make it easier for tenants with pets to rent a property.The change comes as recent research from Propertymark revealed that the average number of available rentals on the books of letting agents has fallen 50% from 30 to 15 amidst continuing supply and demand issues. This is leading to soaring prices, with Rightmove’s annual rental survey finding that rents are up 11% year-on-year to a staggering £1088 per month outside the capital.In a move to aid renters and their rights, a new property portal has also been introduced, allowing tenants to view information about their landlord’s obligations and be able to hold them responsible for these – a move intended to resolve problems early and reduce court battles. IE thinks this is a good thing, in fact more PI claims could be settled via a portal without lengthy involvement from law firms keen to maximise the argument and therefore the eventual fees.

Add on new taxes due from the profits on rental property, plus the increasing legislation on EPC ratings and low carbon heating and energy tech, and you can see several good reasons why small scale landlords may feel it’s time to cash in their chips. IE predicts a 10% shrinkage of Landlord Insurance premiums next year and another 5% in 2024. We are entering an era of decline in this market segment, so brokers need to look elsewhere for good premiums – maybe insuring property flippers?

That flipper trend could grow fast between 2025-2030 and a recent TV show demonstrated how it can pay off, for some lateral thinking – and hard working – property investors.

As private landlords exit the rental market they will have a bundle of cash in the bank earning sweet FA interest, so the process of buying old properties in nice areas and flipping them will seem a more attractive option. I will predict that by 2030 a special `environmental’ tax on all building/extension work will be in place however, plus a load of new rules on eco-friendly tech like banning conservatories, driveways, patios, astroturf lawns etc.

PUBLIC-PRIVATE SOCIAL HOUSING UTOPIA

The other part of this equation is the exansion of investment in the affordable/social housing sector by big name insurance and pension funds. IE has covered the Legal & General projects across the UK in the past and other pension funds are following the same public-private partnership model. In terms of infrastructure, this can only be a good thing, although time will tell if the apartments built today are worth anything in rental income or asset values in 30-40 years time. There’s also a desperate need to re-purpose Britain’s clapped out town centres, because High Street retail is NEVER coming back.

Amazon won, so let’s move on and build town centres which are fit for mixed use events, socialising and essential services where needed; cash access, fitness, package delivery points, leisure activities and more.

IE can see a huge roll-out of insurer and public sector cash into the rental sector as private landlords make their exit over the next five years or so. It will free up lots of stock for redevelopment and refurbishment to EPC A-C standards too. Older houses will be demolished to make way for eco-villages and apartment complexes with heat pumps and cargo bicycle bays, not car parking spaces. An array of noise meters, sensors and cameras will monitor larger housing projects, so that `bad’ tenants can be sanctioned by freezing digital access to parts of the building itself, or online login to the DWP, NHS and other services.

A housing portal app will be linked to your social credit score by 2030, so a reduced score could mean moving to a less salubrious housing project, or a temporary curfew perhaps. This is one possible future scenario, there might be pushback on a surveillance state and mandatory digital passports.

Those who wish for a ban on second homes in scenic parts of Britain may well find that locals are NOT given the right to buy those charming cottages on cheap 50 year mortages after all. In reality, the WEF will demand a different way of life replaces the current one. Your quaint Cornish village may have to accept 100-250 refugees in social housing blocks, in order to meet the `social justice’ part of the latest WEF housing policy, and regardless of the political party in power at the time, that decision will stand.

Whatever happens in the new rental utopia, it seems certain that the days of selling insurance to private landlords are coming to an end, but there could be new opportunities in bespoke cyber, healthcare, digital ID protection, digital asset cover and more on the horizon. I’ll get into those aspects of the future another time.

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About alastair walker 10104 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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